US producers expect alternative protein sources to make inroads over the next five years, and many expect the impact to be negative for farm income.
The February results of the monthly Purdue University/CME Group Ag Economy Barometer, which is based on a survey of 400 producers nationwide – showed that over half (55%) of producers surveyed expect alternative protein sources to capture up to 10% of the combined market for animal and plant-based protein, while a much smaller percentage, approximately 15%, said they expect plant-based alternatives to capture 10% or more of the total protein market.
In a follow-up question, producers were then asked what impact they would expect to see on farm income if plant-based alternatives to animal protein capture a relatively large market share (25%) of the total protein market.
The majority of producers said they think the impact on farm income arising from alternative protein capturing a 25% share of the total protein market will be negative, with approximately four out of ten producers saying they would expect to see farm income decline by 10% or more under this scenario. In contrast, only 3% said they expect farm income might increase 10% or more, while 6% said it might increase about 5%. That portion of producers who said they expected no change in farm income amounted to 30%.
“Producers indicated they expect to see alternative protein sources increase market share in the years ahead and, if the market share becomes significant, they think it’s likely to reduce aggregate farm income,” the barometer said.
Overall, the Ag Economy Barometer, with a reading of 165 in February, was little changed compared to a month earlier and was very near the reading from a year earlier, just before the pandemic’s onset, when the barometer stood at 168.
US farmers remain optimistic about current conditions amid ongoing strength in ag commodity prices and farm income. However, many producers also remain wary about the future, appearing less confident about growth in agricultural trade and expressing concern about possible shifts in environmental and tax policy that could negatively impact the farm sector.
Source: DePutter Publishing Ltd.
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